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Petitioners concede that Mr. Kirst did not obtain record
title to the Newport Beach property during the replacement
period. They contend, however, that obtaining record title was
not necessary because Mrs. Kirst effectively transmuted an
interest in the Newport Beach property to Mr. Kirst, and that
such transmutation satisfies section 1034's continuity of title
requirement.2 Specifically, petitioners contend that, in
exchange for consideration consisting of a portion of Sepulveda
proceeds and the assumption of the Newport Beach mortgage, Mrs.
Kirst orally agreed to transmute an interest in the Newport Beach
property to Mr. Kirst. This agreement, according to petitioners,
occurred on September 4, 1989, and was executed on April 27,
1990. The purported agreement was reduced to writing on January
23, 1997. Petitioners maintain that, while their oral agreement
was not reduced to writing during the replacement period, the
effect of their written agreement relates back to the date on
which they entered their oral agreement, a date which petitioners
maintain occurred during the replacement period.
We are unpersuaded by petitioners' argument that the effect
of their written transmutation agreement, which was executed
roughly 5 years after the close of the replacement period,
2California is a community property State, and property
owned by a person before marriage remains the separate property
of that person after marriage. Cal. Civ. Code secs. 5107, 5108,
(West 1983). However, a married person's separate property may
be transmuted into community property if the parties execute a
written transmutation agreement. Cal. Civ. Code sec. 5110.710.
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